Copper Drops on China Economic Signals; Nickel Advances

By Agnieszka Troszkiewicz and Debarati Roy -
May 13, 2014

Copper futures fell for the first
time in four sessions as slackening factory output raised
concern that demand will ebb in China, the world’s top consumer.
Nickel rose to the highest since February 2012 in London.

Chinese industrial production in April rose at a slower
pace than in March and trailed analyst forecasts, data from the
statistics bureau showed. Fixed-asset investment and retail
sales also missed estimates. The nation accounts for more than
40 percent of global copper demand, according to Barclays Plc.

“Today’s disappointing numbers out of China are making
people a bit nervous,” Frank McGhee, the head dealer at
Integrated Brokerage Services LLC in Chicago, said in a
telephone interview. “It’s becoming clear that the economy is
slowing.”

Copper futures for July delivery dropped 0.4 percent to
settle at $3.1355 a pound at 1:12 p.m. on the Comex in New York.
Yesterday, the price touched a nine-week high of $3.1555.

Declines may be limited amid speculation that the European
Central Bank will add monetary stimulus next month, McGhee said.
ECB President Mario Draghi signaled last week there would be
fresh stimulus in June. The bank’s next policy decision is
scheduled for June 5.

“It will be bullish for copper if the ECB goes ahead and
announces some stimulus measure,” McGhee said.

On the London Metal Exchange, copper for delivery in three
months fell 0.5 percent to $6,845 a metric ton ($3.10 a pound).

Nickel rose 0.4 percent to $21,000 a ton after reaching
$21,625, the highest since Feb. 10, 2012. The price has surged
51 percent this year after exports of raw ore were banned in
January by Indonesia, the biggest miner.